Regional Forest Agreements Bill 2002

Bills Digest No. 91 2001-02Regional Forest Agreements Bill 2002

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

Passage History

Regional Forest Agreements Bill
2002

Date Introduced: 13 February 2002

House:Senate

Portfolio:Forestry and Conservation

Commencement: Sections 1 and 2
commence on Royal Assent. However, the operational aspects of the
Bill (sections 3-12 and Schedule) commence on a day to be fixed by
Proclamation, or failing that, six months after Royal
Assent.

Purpose

To give legislative effect to certain provisions
of the Commonwealth-State Regional Forest Agreements - particularly
provisions on compensation and exclusion of specified Commonwealth
laws - and provide legislative recognition of the existence and
work of the Forest and Wood Products Council.

The Regional Forest Agreements Bill (the RFA
Bill) is the fourth Bill of that name introduced into Parliament. A
Bill was first introduced in mid 1998 but its passage was
interrupted by October 1998 Federal election. The Bill was
reintroduced in the same form in November 1998 but the House of
Representatives and the Senate still remained deadlocked over
amendments by the end of 1999.

An amended version was introduced in August 2001
but no substantive debate took place before the proroguing of
Parliament in October 2001.(1) The current (2002)
version of the Bill largely replicates the October 2001 Bill with
the important exception of the insertion of a Schedule and
particularly item 1 of that Schedule.

This background section traces the origin of the
Regional Forest Agreements Bill 1998 and summarises the main
sticking points behind the failure of the Parliament to pass that
Bill in 1999. What differences there are between the 1998 and 2002
versions of the Bills are discussed in the main provisions
section.

In 1992, the Commonwealth and the States and
Territories signed the National Forest Policy Statement (NFPS). The
NFPS outlined agreed objectives and policies for the future of
Australia's public and private native forests.(2) As
part of implementing the NFPS governments agreed that forest
regions would go through a comprehensive assessment process of all
forest values - environmental, heritage, economic and social -
leading to the establishment a comprehensive and adequate reserve
(CAR) system, agreements on forest management, and the signing of
Regional Forest Agreements (RFAs) between the Commonwealth and the
relevant State.

Collectively, the RFAs are intended to provide a
blueprint for the future management of Australian forests, and the
basis for an internationally competitive and ecologically
sustainable forest products industry.(3) They are
intended to clearly identify those forest resources available for
multiple use, including resources for sustainable timber
harvesting. As shown in the following table, ten RFAs have been
signed across 4 states.

Table 1: Regional Forestry
Agreements

Region

Date Signed

East Gippsland, Victoria

February 1997

Tasmania

November 1997

Central Highlands, Victoria

March 1998

South-West Western Australia

May 1999

Eden, NSW

August 1999

North East Victoria

August 1999

Gippsland, Victoria

March 2000

West Victoria

March 2000

North-East NSW

March 2000

Southern NSW

April 2000

Queensland

Not signed

As part of the RFA process, a joint
Commonwealth-State Forest Industry Structural Adjustment Package
(FISAP) was established to help forest industry businesses and
workers adjust to reductions in the native forest resources
available to industry resulting from the RFAs. Around $100 million
of Commonwealth FISAP funding is available over 1996-2003. However,
in Queensland there has only been limited funding due to the
failure of the respective governments to sign a RFA.(4)
In Western Australia only a 'negligible amount' has been released
by the Commonwealth to date due to the alleged failure of the
Western Australian Government to implement the RFA,(5)
although the Commonwealth has recently announced its intention to
advertise for expressions of interest from businesses involved in
the WA hardwood forestry industry for 'direct' Commonwealth
financial assistance.(6)

The $8.82 million of 'other payments' includes
rescheduling assistance payments in Tasmania, past Agriculture,
Forestry and Fisheries Departmental Costs, payments under the Wood
and Paper Industry Strategy, direct Interim Hardship payments and
expenditure and running costs by the Department of Employment,
Workplace Relations and Small Business on the Forest Industry
Labour Adjustment Package (FILAP) not attributed to individual
states and monies returned to consolidated revenue by that
portfolio. AFFA assumed administrative responsibility for FILAP
with effect from 1 July 2001.

Tasmania received substantial funding over $100
million as part of the RFA process for that State and this is not
included in the above. Tasmania does not have an ongoing FISAP
program.

Estimate spent to 31/12/01 - estimate only as
latest confirmed figures are as at 30 June 2001. Includes FILAP
attributed to individual states.

While the contents of the respective RFAs vary
somewhat, a key feature of all the RFAs except East Gippsland has
been the compensation provisions. Typically, these provide that if,
in order to protect environment or related values in native
forests, the Commonwealth breaches the RFA in a way that curtails
the use of land outside the reserve system, or the sale or
commercial use of forest products sourced from land outside the
reserve system, the Commonwealth will pay compensation to the State
concerned acting as a trustee for the person or company who has
suffered loss.

In February 1998, Senator Bob Brown, obtained a
legal opinion that concluded the Tasmanian RFA was ' statement of
intent only and has no legal effect'.(7) If correct, one
of the obvious consequences of this opinion was that the RFA's
compensation provisions would not be legally enforceable. Around
this time, the Government started to prepare the 1998 Bill. In
response to a Question on Notice from Senator Brown on 2 April
1998, as to the Government's rationale for the Bill, Senator Hill
stated that(8)

Only part three of the Tasmanian and Central
Highland RFAs is expressed to be legally binding. The primary
reason for the legislation is to give effect to some key provisions
which are not expressed to be legally binding thereby providing
greater certainty about the operation of RFAs.

The compensation provisions are contained in
Part three of the RFAs. The implication of Senator Hill's statement
is that the Government considered, at least on the balance of
probabilities, that the compensation provisions were legally
enforceable without any legislation. However, later statements by
the Government indicate that questions over the legal enforcability
of the compensation provisions in the RFA were a motivating factor
behind the Bill:(9)

the Commonwealth has introduced its Regional
Forest Agreement Bill, to ensure that the compensation provisions
of RFAs are legally enforceable against the Commonwealth.

The initial version of the Regional Forest
Agreements Bill was introduced into Parliament in mid 1998. Its
passage through Parliament was halted by the Commonwealth election
in October 1998. It was re-introduced in November 1998 and passed
by the House of Representatives in February 1999.

The Bill was very short with only 8 sections
covering only about 4 pages. Key provisions were:

definitions of what constituted an RFA and an RFA forestry
operation

that RFA forestry operations were exempted from the operation
of various Commonwealth environment and export control laws,
and

that the Commonwealth was liable to pay compensation where this
was required under the relevant provisions of an RFA.

On 9 December 1998, the Bill was referred to the
Senate's Rural and Regional Affairs and Transport Legislation
Committee. The Committee reported on 25 February 1999. The
Chairman's report recommended that the Bill be passed unamended.
Separate dissenting reports were given
by the ALP, the Democrats and the Australian Greens. The ALP and
the Democrats considered that more time was required to address
various aspects of the Bill. The Greens opposed the Bill
outright.

While the Bill was introduced into the Senate in
February 1999, substantive debate did not begin until August. The
Senate made significant amendments to the Bill (the Senate
amendments) but these were rejected by the House of Representatives
in October 1999. The Senate insisted on the amendments and again
sent the Bill back. The Government continued to oppose the Senate
amendments and with the Houses deadlocked, the 1998 Bill was not
debated again in either 2000 or 2001.

There were five main sticking points between the
Government position and the Senate.

As introduced in 1998, the Bill had no objects
clause or similar statement of intent. The ALP introduced an
objects clause that made specific reference to the
NFPS.(10) The purpose of the clause was 'to ensure RFAs
are consistent with the NFPS'. The consistency was to be judged
with reference to a number of criteria, which were directly derived
from the list of 'national goals' contained in NFPS. The criteria
also required that the precautionary principle be applied in a RFA.
The Democrats proposed an amendment to the ALP's objects clause
that would require an RFA to be consistent with the 1995 National
Competition Policy Agreement(11) but was this was not
supported by the ALP.

In opposing the ALP's objects clause of Senate
amendments, the Government said(12)

we have grave concerns about an objects clause
because that just opens up the opportunity for people who seem to
have heaps and heaps of money to take someone to court after the
event when they have committed their billion bucks in a paper
making plant and say, You cannot do this because RFA No. 5 in
Victoria does not meet the objects of the act. That is a great
opportunity for a couple of lawyers to make a lot of money. The
fact of life is that investors do not want that problem; they want
uncontestable arrangements. That is what you achieve with an
objects clause: you start to create opportunities for litigation.
That is why I think it was totally unnecessary. But we were
prepared to have some limited objects that we felt would not open
the legislation to that sort of litigation, and we said so.

On this basis, the 2002 Bill actually contains a
short objects clause. This is discussed in the main provisions
section of this Digest.

The ALP successfully moved a Senate amendment
that, amongst other things, would mean that an RFA made after 1
March 1999(13) would only be an RFA for the purposes of
the Act if it were made in accordance with proposed parliamentary
scrutiny provisions. This meant that if an RFA did not comply with
this requirement, the Act would not apply to it, thus defeating the
Government's purpose in relation to the enforcebility of RFA
provisions.

At the heart of the scrutiny provisions was the
requirement for RFAs to be tabled and the ability of either House
to disallow them within 15 sitting days of tabling. The rationale
for this amendment was that the(14)

Regional forest agreements have a long term and
massive impact on our forests. Therefore, it is quite reasonable
that the Senate and this House ask for better scrutiny. It is
reasonable that the regional forest agreements be subjected to
public scrutiny before their final ratification. In Western
Australia, the Regional Forest Agreement was signed off before
anybody else saw it. There was no public scrutiny. That is the way
this operates . The Senate disallowance, in my view, is the best
mechanism for making sure there is proper public scrutiny of these
very important agreements.

The Government opposed the disallowance
provisions for two reasons. The first related to the possibility of
an opened-end delay:(15)

The RFA process itself involves both
comprehensive scientific assessment and comprehensive stakeholder
engagement. On what basis will a house of parliament be better
placed to determine whether an RFA is appropriate or not? if the
RFA is disapproved, there is no requirement under the proposed
amendment for the disapproving house to specify what aspects of the
RFA are not acceptable so one could envisage extensive rounds of
submission and resubmission of a draft RFA without any positive
resolution. These proposed amendments are a recipe for uncertainty
.it will produce yet another process that has no obvious merit.

The other reason was the question of whether a
disallowance process would be invalid due to inconsistency with
section 99 of the Commonwealth Constitution. Section 99 provides
that

the Commonwealth shall not, by any law or
regulation of trade, commerce, or revenue, give preference to one
State or any part thereof over another State or any part
thereof.

Advice from the Australian Government Solicitor
indicated that, amongst other things, as the disallowance procedure
would only apply to post-March 1999 RFAs, this would constitute
section 99 preferential treatment.(16) This view was
rejected by the ALP.(17)

However, this issue may well be moot in the
Senate's debate of the 2002 RFA Bill. In the September 2001 Senate
report of the 2001 Bill, the ALP's position was that disallowance
provisions were no longer required because all but the Queensland
RFA had been signed and thus Parliament was no longer being asked
to 'endorse' yet to be negotiated agreements as they were under the
1998 Bill.(18)

Subclause 5(3) of the 1998 Bill excluded the
operation of the environment assessment provisions of the
Environment Protection (Impact of Proposals) Act 1975
(EPIPA) and the ability of the Governor-General to invoke the
protective measures of the World Heritage Properties
Conservation Act 1983 (WHCPA).

After the Bill had passed the House and been
introduced into the Senate but before substantive debate on the
Bill had commenced in the Senate, the Environmental Protection
and Biodiversity Conservation Act 1999 (EBPCA) was passed,
which repealed both the EPIPA and the WHCPA, although the EPBCA was
not to come into effect until July 2000. Part 3 of the EPBCA
effectively replaced the EPIPA assessment provisions and WHCPA
invoking measures mentioned above.

Section 38 of the EPBCA enabled a person to
undertake RFA forestry operations without being subject to the
requirement for environmental approvals under Part 3 of the EPBCA.
However, under section 42, section 38 did not apply to forestry
operations

in a property included in the World Heritage List; or

in a wetland included in the List of Wetlands of International
Importance kept under the Ramsar Convention; or

that are incidental to another action whose primary purpose
does not relate to forestry.

A Senate amendment incorporated similar language
to that of EPBCA section 42 into subclause 5(3) of the 1998 Bill.
Without these amendments subclause 5(3) would have likely negated
section 42 EPBCA on the general principle that, where there is
inconsistency between two pieces of legislation, the more recent
legislation should prevail.

The Senate amendment was opposed by the
Government(19) and was not incorporated into the 2001
Bill. However, an amendment to the same legal effect has been
incorporated into the 2002 RFA Bill (item 3 Schedule 1), so this
issue may no longer be a sticking point between the Senate and
House of Representatives.

With the exception of the East Gippsland
RFA,(20) all RFAs contain provisions for the
Commonwealth to pay compensation in certain circumstances should
the Commonwealth take action inconsistent with the RFA to protect
environment and heritage values in native forests.

The RFAs essentially state that compensation
will be payable where, in relation to land outside the CAR system,
the 'foreseeable and probable consequence' of the Commonwealth's
actions are to 'prevent or substantially limit' the use of that
land for forestry operations, sale of forest products, mining
operations, sale of mining products, or road building for transport
of forest products. In general, the activities prevented or limited
were to have been undertaken or intended to have been undertaken at
the time of the announcement of the Commonwealth's proposed action.
The RFAs provide that the intention to undertake activities is to
be established 'on the basis of contracts, documentation of
management history or other records establishing clear intent and
in existence immediately prior to the announcement of the proposed
Commonwealth action'. Compensation is only payable for 'the amount
of reasonable loss or damage'. If the Commonwealth and the relevant
state cannot agree on whether a compensation claim should be paid
or how much should be paid, the RFAs provide that the matter is to
be referred to an arbiter.(21) Presumably there are
reasonably standardised methodologies by which professional
arbiters calculate what 'reasonable loss or damage' means in any
given situation.

As introduced by the Government, the 1999 Bill
(and carried over to the 2002 Bill) provided that 'the Commonwealth
is liable to pay any compensation that the Commonwealth is required
to pay a State in accordance with the compensation provisions of an
RFA.' The Senate altered this to 'the Commonwealth is liable to pay
any compensation in relation to actual losses arising from the
loss of legally exercisable rights that the Commonwealth is
required to pay a State in accordance with the compensation
provisions of the RFA for a breach amendment or termination of
any RFA.' The ALP stated that(22)

the opposition supports the concept of
compensation and is happy to clarify any legal uncertainties.
Equally, we have an obligation to protect the interests of the
taxpayers of this country. We believe the bill is deficient in
failing to properly define the extent of the Commonwealth's
potential compensation liability. Senate amendments (10) to (13) do
this, chiefly by linking compensation to `actual losses arising
from the loss of legally exercisable rights'.

This amendment was rejected by the Government,
saying it(23)

also rejects the Senate amendments which propose
to alter the compensation clause in the bill in a way that not only
is confused but will have no effect, as the liability to pay
compensation continues to arise out of the terms of the RFA itself.
It is unclear as to what the term `losses arising from the loss of
legally exercisable rights' actually means. It is clearly designed
to open opportunities for litigation and create uncertainty in
terms of the compensation a dispossessed company would otherwise
anticipate.

As the Bill contains no change to previous
versions and the ALP has continued to push for provisions limiting
liability to 'actual losses', this issue may continue to be a
sticking point.

The 1998 Bill as introduced made no provision
for an advisory industry council. Whilst in government, the ALP
planned to establish a council to 'drive' the implementation of its
Wood and Paper Industry Strategy,(24) released
in December 1995. Chaired by the responsible Commonwealth Minister,
the Council membership was to be drawn from industry, unions, the
States, local government, the scientific community and the
conservation movement.(25)

The members of the Council were announced in
January 1996, but it appears the Council was abolished after the
new Government came to power.(26) However, during the
Coalition's second term, the Government and industry stakeholders
developed what was to become the Forest and Wood Products
Industry Action Agenda Forest and Wood Futures (the Action
Agenda). The Government's September 2000 response to the Action
Agenda included a commitment to establish a Forest and Wood
Products Council.

The Council has met 3 times since November 2000,
with its last meeting being in September 2001. The Council is
chaired by the Forestry and Conservation Minister, the Hon Wilson
Tuckey. There is one union representative on the Council, with the
remainder being timber industry representatives, including in the
furnishings and timber merchants sector. There are no conservation
or tourism representatives amongst designated observers to the
Council.

The issue of an industry council was also
examined by the Senate committee inquiring into the 1998 Bill. The
Chairman's report recommended a council be established, although it
did not make any recommendations as to whether it should have a
statutory basis or what its role and membership should be.

In relation to the 1999 Parliamentary debate,
the major issues of contention between the Government and the
Senate related to the Council's membership and functions. Under the
Senate's amendments to the Bill, the provisions relating to the
Council (termed a Wood and Paper Industry Council) ran to some 20
sections. The Council's functions reflected a very proactive body,
able to undertake studies and report to the Minister on its own
initiative. It was to be a large body of at least 15 people, with
membership from a very wide range of interest groups beyond the
timber processing sector, including unions, downstream timber
users, conservation and tourism. The Chair and Deputy Chair were to
be drawn from either timber processors / user groups or union
representatives.

The Governments view on this
was(27)

[we agree] that a wood and paper industry
council should be established, but we on this side of the chamber
do not agree that it is necessary to spell out all the fine detail
of the membership and structure of that committee. We would sooner
have a flexible approach to this and a committee which is
structured to deal with the principles required in this area but
which can have the flexibility to change membership and direction
and to do things that are in the best interests of the timber
industry. The amendments put before us ignore the fact that rigidly
setting something in concrete in legislation such as this
effectively removes any flexibility that such an industry council
may have. It is not necessary for it to be put into
legislation.

It appears from the 2001 Senate report that the
ALP may not continue to insist on retaining the 1999 Senate
amendments with respect to the Council's membership and
functions.

(a) to give effect to certain obligations of the
Commonwealth under Regional Forest Agreements;

(b) to give effect to certain aspects of the
Forest and Wood Products Action Agenda and the National Forest
Policy Statement; and

(c) provide for the existence of the Forest and
Wood Products Council.

The 1998 Bill had no objects clause.

New section 4 contains a list
of definitions. Notably, the definition of RFA or Regional Forest
Agreement remains the same as that in the 1998 Bill as originally
introduced. The definition of RFA forestry operations has changed.
In relation to NSW, Victoria and Tasmania they are defined as

forestry operations (as defined by an
RFA as in force on 1 September 2001 between the Commonwealth and
[relevant State]) that are conducted in relation to land in a
region covered by the RFA (being land where those operations are
not prohibited by the RFA)

In relation to WA, it is defined as

harvesting and regeneration operations
(as defined by an RFA as in force on 1 September 2001 between the
Commonwealth and Western Australia) that are conducted in relation
to land in a region covered by the RFA (being land where those
operations are not prohibited by the RFA)

There is no definition for Queensland. The
Commonwealth and the Queensland Governments have been unable to
reach an agreement over a draft agreement(28) and hence
no RFA has been signed.

New section 5 provides that the
Bill legally binds the Commonwealth. This is unchanged from clause
4 of the 1998 Bill.

New section 6 provides that
certain Commonwealth legislation, or parts of them, do not apply to
RFA wood or RFA forestry operations. The Explanatory
Memorandum to the Bill comments that this exclusion

is because the environmental and heritage values
of these regions have been comprehensively assessed under relevant
legislation during the RFA process and the RFAs themselves contain
an agreed framework on ecologically sustainable development of
these forest regions over the next 20 years.

The effect of new subsection
6(1) is that measures under the Export Control Act
1982 do not apply to RFA wood. New subsection
6(2) excludes any other 'export control law' applying to
RFA wood, unless the relevant law expressly refers to RFA wood.
Export control law is defined as 'a provision of a law of the
Commonwealth that prohibits or restricts exports or which has the
effect of prohibiting or restricting exports'. Note that the export
controls on woodchips from regions covered by RFAs have already
been lifted by the combined effect of the Export Control (Hardwood
Woodchips) Regulations 1996 and the Export Control (Regional Forest
Agreements) Regulations 1997.

New subsection 6(3) provides
that 'the effect of RFA forestry operations must be disregarded for
the purposes section 30 of the Australian Heritage Commission
Act 1975' (AHCA). Essentially, under section 30, the
Commonwealth is constrained from taking any action which adversely
affects a place in the Register of the National Estate, unless
there is no feasible and prudent alternative to this action.
Section 30 does not provide any protection against the actions of
non-Commonwealth entities such as individuals, companies or local
or State Governments. The AHCA is itself currently the subject of
repealing legislation (the Environment and Heritage Legislation
Amendment Bill (No.2) 2000) and associated Bills. If the AHCA is
repealed, protection of Australian Heritage will mainly occur under
Part 3 of the EPBCA.

New subsections 6(1)-(3) are
essentially the same as clause 5 of the 1998 Bill.

New subsection 6(4) provides
that Part 3 of the Environmental Protection and Biodiversity
Conservation Act 1999 (EPBCA), which deals with what matters
require Ministerial approval before they can proceed, does not
apply to an RFA forestry operation that is undertaken in accordance
with an RFA. This reflects a similar provision in section 38 of the
EPBCA. However the effect of new subsection 6(4)
is modified by item 3 of Schedule 1. Item 3 provides that
new subsection 6(4) will not
apply to forestry operations or RFA forestry operations affecting a
World Heritage property, Ramsar wetland or forestry operations
'incidental to another action whose primary purpose does not relate
to forestry'. This is discussed further in the main provisions
section of this digest under item 3 of Schedule 1.

New section 7 provides that the
Commonwealth can only terminate an RFA in the way set in the
termination provisions of the relevant RFA. One effect of
new section 7 is that if the termination
provisions of an RFA which is in force are amended after the Bill
commences, the Commonwealth could only legally terminate the RFA
under the 'old' termination provisions rather than the new version.
New section 7 would have to be amended to allow a
valid Commonwealth termination under any new provisions.

New section 7 is unchanged from
clause 6 of the 1998 Bill.

New section 8 deals with
compensation for breach of a RFA by the Commonwealth. It provides
that the Commonwealth is legally liable for any compensation it is
required to pay to a State pursuant to compensation provisions
contained in the relevant in force RFA. The fact that the RFA
expires or is terminated after the breach occurs does not effect
the Commonwealth's liability. If necessary, compensation may be
recovered by a State through a court action as a debt. Compensation
is payable from funds appropriated by Parliament.

New section 8 is unchanged from
clause 7 of the 1998 Bill.

New section 9 provides that the
Minister must publish a notice in the Gazette when a RFA is entered
into or ceases to be in force. The notice must provide details of
the relevant region and the dates of entry into force or
cessation.

New section 9 is unchanged from
clause 8 of the 1998 Bill.

New section 10 deals with the
tabling in Parliament of RFAs, amendments to RFAs, RFA annual
reports and RFA review reports. New subsections
10(1)-(2) require that the Minister must cause a copy of
an RFA to be tabled in each House of the Parliament within 15
sitting days after the RFA is entered into or the Bill comes into
force, whichever is the later. However, a RFA that has already been
tabled in a House before the Bill comes into force does not have to
re-tabled in that House. Amendments to RFAs must also be tabled in
each House within 15 sitting days after the amendment is made, or
the Bill comes into force, whichever is the later. The Minister
must also table RFA annual reports and RFA review reports within
the same timeframe.

New section 10 is an entirely
new section compared to the 1998 Bill, having emerged from the
negotiations in 1999.

New section 11 deals with the
Forest and Wood Products Council (the Council).

New subsection 11(1) requires
that the Minister 'must take all reasonable steps to ensure that,
at all times, there is in existence a committee known as the
[Council] and established under executive power of the
Commonwealth'.

New subsections 11(2)-(3) set
out the objects and functions of the Council. These mainly relate
to providing advice to the Minister about the implementation of the
Forest and Wood Products Industry Action Agenda Forest and Wood
Futures (the Action Agenda) and carrying out any tasks
specifically allocated to them under the Action Agenda. Other
objects and functions focus on liaison and cooperation between
'different sectors of the forest and wood products industry'.

In performing its functions, new
subsection 11(4) limits the Council to activities that
could be legislatively conferred on the Council under the
Constitution. In particular, the Council may perform its functions
'in relation to matters arising in the course of, or that concern'
interstate or overseas trade, constitutional corporations or any or
all of the Territories. It is noticeable that no reference is made
to the external affairs power, although this is not explicitly
excluded by new subsection 11(4).

New subsections 11(5)-(6)
require the Minister to hold meetings of the Council on request by
a majority of the Council and at least twice each calendar
year.

New subsections 11(7)-(9)
require the Council to undertake a review in the second half of
2004 of whether it should continue to exist and, if so, what its
functions and procedures should be.

The Council must 'consult with stakeholders in
the forest and wood products industry' in undertaking the review.
The Council must present its review report to the Minister, who
must cause the report to be tabled in both Houses of the Parliament
within 15 sitting days after receipt from the Council. While the
review must be finished by 31 December 2004, no deadline for the
preparation or presentation of the review report to the Minister is
contained in new section 11.

New section 11 is an entirely
new section compared to the 1998 Bill.

New section 12 inserts
schedule 1 which contains various amendments to
the EPBCA.

Item 1 of schedule
1 repeals existing section 38 of the EPBCA and replaces it
with a new version. It simply updates references to the Bill as the
Regional Forest Agreements Act 2002 as opposed to the existing
Regional Forest Agreements Act 1999.

Item 2 of schedule 1 defines
the term 'forest operations' to mean any of the following done for
commercial purposes:

(a) the planting of trees;

(b) the managing of trees before they are
harvested;

(c) the harvesting of forest products;

and includes any related land clearing, land
preparation and regeneration (including burning) and transport
operations. For the purposes of paragraph (c), forest
products means live or dead trees, ferns or shrubs,
or parts thereof.

Item 3 of schedule
1 provides that new subsection 6(4) of
the Bill will not apply to forestry operations or
RFA forestry operations affecting a World Heritage property, Ramsar
wetland or forestry operations 'incidental to another action whose
primary purpose does not relate to forestry'. The effect of item 3
is to preserve the status quo under the EPBCA that currently
requires the Environment Minister's approval before any forestry
operations significantly impacting on World Heritage properties or
Ramsar wetland can proceed.

Between 3 February 1997 and 31 March 2000, the
Victoria and Commonwealth Governments have signed Regional Forest
Agreements (RFAs). When some of these RFAs were signed, estimates
were given on the possible creation of a significant numbers of new
jobs in the forest processing industries. Under the East Gippsland
RFA, signed in February 1997, it was expected that:

The Victorian proposals to use low-grade wood,
previously left on the forest floor, have a capacity to create up
to 400 new jobs in new industries such as veneer and particle board
manufacture(29)

Under the Central Highlands RFA, signed in 1998
it was expected that:

Proposals for further value adding pave the way
for the creation of about 300 new jobs in the
region(30)

It would appear that the forest resources
database upon which the five RFAs were predicated, and upon which
sustainable yield figures were calculated, may have been
inadequate. The Statewide Forest Resource Inventory (SFRI),
intended to provide a comprehensive and consistent database for
establishing sustainable yields for each Forests Management Areas
(FMAs), was initially started in 1994. Three million dollars was
allocated in May 2000 to fast track the SFRI and it is expected to
be completed in 2004.

In 2001 the Victorian Government established an
Expert Data Reference Group comprised of Professor Jerry Vanclay
and Dr Brian Turner. The Group reported to the Government on 31
October 2001 and found that 'because of uncertainties in the yield
estimates for many FMAs, the Department of Natural Resources and
Environment is not well placed to make long term commitments to
industry.'(31) They went on to say 'it is also evident
that the resource assessments and yield forecasts for many FMAs
have deficiencies that need to be redressed. Renewed emphasis must
be placed on inventory and yield forecasting work, and resource
estimates should be revisited as additional data become available.
Unfortunately, deficiencies in current estimates mean that future
estimates may differ substantially from the current
estimates.'(32) The Report included a table which showed
licensed sawlog volume, a calculation for estimated sustainable
yield and the reduction in cut to achieve sustainable yield. The
reductions varied across the State but averaged 34% with some of
the greatest reductions required in Midlands FMA and Central
Gippsland FMA of 83% and 50% respectively.

On 21 February 2002 the Victorian Premier, the
Hon Steve Bracks, announced that logging in native forests across
the State would be reduced by one third (31%) and that $80 million
would be provided to help forest workers and regional communities.
A new body, VicForests, would be established to manage Victoria's
native forests. The three largest cuts in log volume yield would be
in Midlands (79%), Central Gippsland (50%) and East Gippsland
(43%).(33) The reduction in logging rates apply to
sawlogs production not woodchip production which is considered to
be a by-product of sawlog operations. However the Premier is
reported as saying that he expected woodchipping to be reduced in
line with sawlog production.(34)

The Victorian forest industry predicted losses
of up to 1500 jobs (direct and indirect) as a result of the cut in
logging rates.(35) Graeme Gooding of the Victorian
Association of Forest Industries said that the industry was
appalled by the revised figures, but he applauded the government
for acting to address the issues when warnings to the previous
government had fallen on deaf ears.(36) He said that
instead of reducing logging rates Mr Bracks should have opened up
more areas for controlled logging.(37) Federal Minister
for Forestry and Conservation, Senator Ian MacDonald, stated that
'the Victorian Government has adopted a whole new process of
assessment which has removed from the areas available for logging a
very considerable part of the Victorian forest, that was always
originally intended to be available.'(38) He indicated
that the Commonwealth would investigate whether Victoria has
breached the Regional Forest Agreements. He said that "Already
investment strategies are being questioned and industry will be
looking for investments in other states which are prepared to
honour resource commitments and intergovernmental
agreements."(39)

Timbers workers at a rally before Victorian
Parliament on 28 February 2002 called for legislation to guarantee
the survival of their industry. Later in the day, the Victorian
Premier told Parliament that he would introduce a new Forests Act
to give resource security to the forest industry.(40)
The Government was not committed to legislate for minimum timber
volumes. Lindsay Hesketh of the Australian Conservation Foundation,
said the Government was engaging in industry restructuring, not
tackling conservation issues and that sawmills were being phased
out to feed woodchip exports.(41)

On 27 February 2002, the Western Australian
Government reaffirmed an indicative sustained yield of 140,000
cubic metres per annum of jarrah sawlogs.(42) This is a
reduction from the 324,000 cubic metres per annum figures included
in the Regional Forest Agreement for the South-West Forest Region
of Western Australia. The reduction was necessary because of the
Government's decision in 2001 to end logging in all old growth
forests had significantly reduced the available resource. The WA
Forestry Minister, Kim Chance, said that 194 direct jobs had been
lost since this decision and up to 300 jobs could go before the
industry restructuring was competed.(43) According to
press reports 37 mills will close in the south west
region.(44) Ten mills will be invited to provide
business cases so that the Government can decide which will receive
final allocations in line with the final sustained yield over the
next 10 years. This yield figure is to be developed by the
Conservation Commission through the new Forest Management
Plan.(45)

The Hon Wilson Tuckey 'Tuckey announces financial support for
Queensland native hardwood industry' Media Release 2
October 2000. For a discussion of the legalities of the
Commonwealth position on Queensland funding see J Brown, 'Beyond
Public Native Forest Logging', Environmental and Planning Law
Journal Vol 18(1) February 2001 pp. 71 92 and especially pp.
81 82.

Mairi Barton 'Payment urged in timber standoff' West
Australian 6 June 2001

Angus Martyn
8 March 2002
Bills Digest Service
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